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Saudi Arabia is the largest exporter of crude oil in the world, yet rapidly increasing domestic demand threatens to impact on this status, and that could have dire consequences for global oil trade, and oil prices.
Saudi Arabia’s Oil Minister, Ali Al Naimi, recently announced at a conference in Hong Kong that his countrywill start to drill for shale gas this year. The hope is that increased production of natural gas will cover rising domestic energy demands, without the need to use crude oil; this will help to maintain crude oil export levels at their current.
Naimi explained that they “have rough estimates of over 600 trillion cubic feet of unconventional and shale gas so the potential is very huge and we plan to exploit it.”
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Baker Hughes has even estimated that Saudi Arabia may hold as much as 645 trillion cubic feet of recoverable shale gas, the world’s fifth largest reserves.
Saudi Arabia hopes that they can encourage a shale boom similar to the boom that has been experienced in the US which has helped to lift them above Russia as the largest natural gas producer in the world, and according to the International Energy Agency, is expected to turn them into the largest crude oil producer in the world by 2017.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com